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Coventry brings in 125% buy-to-let ICR


Coventry for Intermediaries has brought in a tiered buy-to-let interest coverage ratio system.

The ICR is 125 per cent if each applicant is a non-tax payer or basic rate taxpayer whose total gross annual income is less than £40,000.

ICRs will be 140 per cent for higher rate taxpayers or those earning more than £40,000 a year.

Previously the lender had an ICR of 140 per cent across the board.

The lender is also dropping its requirements for minimum income – previously £25,000 or £30,000 for joint applications.

Coventry for Intermediaries is also ending its need for a landlord to have been employed for at least 12 months.

Coventry for Intermediaries director of intermediaries Kevin Purvey says: “We’ve listened to and worked with intermediaries, and we think that a tiered ICR calculation – as part of our overall assessment – is the best way to adapt to the changing market.”

The lender will continue to stress at 5.5 per cent, or 5 per cent for fixed rate products of five years or longer.



TMW relaxes ICR to 125% for low rate taxpayers

The Mortgage Works has relaxed its interest cover ratio for buy-to-let lending to lower rate taxpayers from 145 per cent to 125 per cent. The cut will apply to those paying no tax and basic rate tax on income. When the Prudential Regulation Authority brought in tougher underwriting standards for buy-to-let at the beginning of […]

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Paragon to hike ICR for high-tax landlords to 140%

Paragon is increasing its interest cover ratios for landlords in the higher-rate tax band from 125 per cent to 140 per cent. The lender is making the changes ahead of the increase in costs for landlords when the mortgage interest rate tax relief changes come in next April. The changes come in on 12 April. […]


Leeds bucks trend by setting ICR at 140%

Leeds Building Society has made a number of changes to its buy-to-let lending criteria, including raising its interest coverage ratio to 140 per cent. The society has bucked a trend of lenders increasing ICRs to 145 per cent and says its move from 125 per cent stress tests to 140 per cent for buy-to-let and […]

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